Sky told to hand over footy and film rights

The UK's media regulator Ofcom has told Sky it should offer to sell rights to football games and Hollywood films to other broadcasters at a fair price.

The investigation into pay TV was begun after complaints were made by BT, Virgin, Setanta and Top Up TV. Ofcom reckons that consumers make their choices of which service to go with based on content not the features of different platforms. Big films and live Premiership games are a big draw for viewers and Sky has "market power" in these areas.

Because of this Sky is likely to restrict access to this content to stop rivals competing properly and Ofcom said: "Our review of the evidence indicates that distribution of these channels is indeed limited."

Secondly, Sky could also price wholesale deals at such a level as to make them uncompetitive for rivals. But Ofcom said difficulties in analysing how wholesale margins work meant it was unable to verify this claim.

Ofcom ruled out sending the issue to the Competition Commission at this time. Instead: "We propose to address our concerns by requiring Sky to wholesale designated premium channels on regulated terms." It said would be premature to revisit this until it can see what impact its proposals have on the market. The regulator also ruled out a structural remedy - forcing Sky to split up its business - as disproportionate to the level of consumer harm seen.

A spokesman for Virgin Media said: "Virgin Media has long argued that the pay TV market currently operates in a way that serves the interests of Sky rather than the consumer. We are therefore encouraged that Ofcom has recognised Sky's dominance in the wholesale supply of its sports and movie channels and is proposing to take action compelling Sky to supply these channels to other pay TV providers in a fair and non-discriminatory way. We believe such arrangements are the very least that are needed to deliver consumers lower prices, increased choice and more innovation."

Sky said it welcomed the chance to continue talking to Ofcom and would respond fully in due course.

Interested parties have until 9 December to tell Ofcom what they think of its proposals, available in full here. ®